ABSTRACT
This chapter examines Peru's relations with the Council for Mutual Economic Assistance (CMEA) socialist countries of Eastern Europe and focuses on trade, aid, and technology transfers. Relations between Peru and the socialist countries have followed an irregular course, affected by both rapid changes in the world and national political factors. Aid is part of the broader economic relationship between both partners. In the midst of Peru's worst economic recession of the century, the expenditures have shocked some of Peru's foreign creditor banks that are worried about the delayed repayment of the interest arrears. Industrial technology and equipment from the socialist countries is often cheaper, is supplied with easy credit arrangements, and possibility exists to pay back with goods instead of hard currency. Some of the problems encountered in promoting mutual trade are the imbalances in the dynamics of exports and imports and the asymmetrical commodity structure. Relations with the CMEA countries have offered a wide range of spheres of cooperation.
